All Forum Posts by: David F.

Mitch,

That is exactly my pitch. I tell people that the volatility of the stock market is simply too much to bear, here you earn good steady returns and can sleep at night easy knowing that the occupany is there. Perhaps it's simply about finding that right investor.

With your model, the investor hold the lien? Behind the bank? Or are they funding the whole deal?

1) You are correct and that is the hitch. We do not have a track record. With regardss to "hitching to a local expert" does that mean we are basically hooking up with another syndicator and present that there is the possibility of us bringing in investors?

2)We are not the decision makers given that (relating to point 1), without a track record, there is no one out there that will give money carte blanche. I made the assumption that if I were to find someone, ultimately I would have to go back to them to get approval to purchase the property.

3) That fee seems reasonable and probably something most investors would find ammenable.

David F.

My partner and I have a combined 10 years experience in real estate investment analysis and leasing and have decided that it is time that we start investing for ourselves. The only issue is that neither of us have any significant capital to invest and will be 100% completely dependant on investors to fund our first few properties. Here are the issues:

1)How do we overcome the question "why do I need you guys, I can just invest myself?" Essnetially our focus is on multiresidential properties working with our network of brokers. Ultimately most people we will contact would/should ask that question and say "I can find a broker myself and buy something similar, why am I giving up anything just for your two?

2) How do we work with brokers to begin with? That is, ultimately we are not the final decision makers and at best we would be characterized as "intermediaries". I know that brokers wouldn't be very accomodating knowing that they are going accross the city essentially showing properties to people that have ZERO say in the final decision. What can I say to brokers to help smooth that over?

3)Assuming that a partnership is not viable, but we present ourselves as property locators/consultants/(read Birddogs), what is a typical fee that we could charge for just presenting the property to them assuming that they close?

Thank you for all of your help.

Take care,

David.

Hello All,

Question:

My situation is as follows: I have been a real estate analyst for the past 6 years and have all the knoweldge and knowhow as to what a succesful commercial real estate investment looks like. I don't have much money and the only way I could ever purchase a building on my own would be through bringining in a partner/investors. I would provide the expertise and asset management skills, they would provide the capital.

Issue: I live in Canada. Up here practically ALL mortgages are recourse loans (given that I would like to purchase a multi-family property). It would be IMPOSSIBLE to be able to entice someone to come in, put up the capital AND the risks that are associated with putting up a personal guarantee. Most investors simply would want to invest and limit their risk to what they have put up.

What should I do? The only solution that I have come up with is if I can sell the risk. That is, I have to find someone who would be comfortable with being the guarantor and he would be compensated with x% of the returns and income. If anyone has any other ideas, I would be thankful.

Take care,

David F.

Thanks for the response Dan. I was tooling around the internet and found an example assigment contract...most of the ones I have seen stated that the Assignor is still liable and responsible under the P and S aggreement. But I found an assignment agreement that had this clause "Assignee hereby assumes all of Assignor's duties and obligations under said Real Estate Purchase and Sale Agreement. This Assignment shall be binding upon Assignor and shall inure to the benefit of Assignee and its successors, heirs and assigns"

Essentially that would get me off the hook as ultimately the Assignee is now on the hook.

I am definitely going to learn P&S and assignment contracts to a T if I want to play this game.

Question: how much experience do you have doing assignments and how does someone get started?

Take care,,

David.

It's late, and thought my user name was from another forum that I post in..where I use the name THE HUN..,.so excuse THE HUN bit...long story....loll....

David..

I have read in many different books/articles the Pro's of assigning real estate purchase agreements. It seems like a simple enough strategy for people to get started in real estate who may not have enough money for a downpayment or can qualify for a mortgage. I don't have enough for a downpayment, I find a property, lock it up in a P&S agreement and write down "theHun69 and/or assignee" in the purchaser section. I go to a list of investors, and bascially can assign that contract to any one of them for an agreed upon fee that is negotiated between ourselves.

QUESTION: Let's assume that I assign the contract to Mr. Moneybags. Moneybags has the money, we pass through the financing condition, and then one day before closing, Moneybags loses all of his money in the stockmarket/leaves to live in Nassau, or for whatever reason simply does not close on the deal. MY NAME IS STILL ON THE CONTRACT!!! What is my liability here? I would think that I would now have to close on this contract, which, I obviously can't.

1)What are the consequences?
2)Are there any ways of mitigating/managing this risk?
3)Instead of doing this deal via assignment, can I have a standing agreement with Moneybags that states that if I present them a real estate opportunity, put together an investment package and they close on that deal, then I get a piece of the deal, either through a fee or possibly equity in the deal...although if I do this, how is this not a form of agency, and is this not illegal without the proper licensing?

I would appreciate your thoughts/comments/advice. I took my first step in real estate investment by meeting a mortgage broker today, I am keeping up this momentum and I think this is a viable strategy, although the risks concern me.

Take care,

THE HUN.

Tony Robbins always talks about that one moment in a person's life where they look around and are finally sick of being in that situation, they have reached a breaking point. Well folks, I am finally there. The issue: I have a lot of knowledge about real estate (specifically commercial real estate valuation - I am a real estate analyst by trade) however, I don't have money for deals.

My goal to overcome the lack of funds is to find joint venture partners. However, I would appreciate anyone who has been involved in JV's to discuss the likelihood of partnering with someone who does not have money, but who can find deals (hopefully) and assess their value and put a business plan together regarding significantly improving its value.

Take care,

David.

That sounds like a more reasonable plan. It's easy getting caught up reading certain investment books, and as I've stated in another thread, I want to make sure that I'm going into this with the appropriate expectations and getting my feet wet via bird-dogging and seller/buyer brokering sounds like the best way to gain experience and with that under my belt it certainly would be more convincing to get someone to invest with me.

Take care,

David.

I have to go back to the book at the library, but from memory, Lindahl frames it such that all you need is a strong business plan, good repositioning opportunity, and especially an extremely competent, experienced and appropriate property management company and this should ameliorate most concerns from potential investors and the banks.

With regards to the project size, I don't remember him stating any minimums but he would constantly framet things like "and that is the profit you show on just 20 units, imagine the p/l for 200 units", things like that. As well, he talks about the people who went to his seminars, with ZERO experience, and closing on 180 unit properties.

At the end of the day, I want to get involved in this business, but I want to do it right going in with the appropriate expectations and I'm not convinced I'm getting that from Lindah's book.

Take care,

David.